THOR Industries, Inc. (NYSE: THO) today announced financial results
for its first fiscal quarter ended October 31, 2022.
“Following a record fiscal 2022, the RV market
has been negatively affected by macroeconomic headwinds impacting
our consumers and independent dealers. Given those conditions, our
teams performed exceedingly well, exhibiting the value of their
experience in navigating shifting markets, delivering net sales of
$3.11 billion, consolidated gross profit margin of 15.7% and net
income attributable to THOR of $136.2 million,” said Bob Martin,
President and CEO of THOR Industries.
“Our first quarter results reflect the
flexibility and disciplined execution of our teams to respond to
dynamic market conditions. We proactively adjusted production
levels of towable products to balance wholesale production with the
pace of softening retail sales while making continued progress in
restocking inventory levels of motorized product. Aligning our
production with the shifting retail environment has been, and will
continue to be, key to our success in the temporary softening of
our market. As we have during prior periods of unfavorable retail
environments, during the quarter we took advantage of our variable
cost model to bring our cost structure in line with current market
conditions.
“THOR has a proven track record of demonstrating
resilience in economic down cycles, and we expect fiscal 2023
results to be no different. To be sure, the retail environment is
being impacted by inflation and monetary policy driving higher
interest rates. THOR is built to perform in these shifting
conditions, with an unparalleled track record within the industry.
The current environment is challenging, but it does not diminish
the widely-shared, long-term optimism for the industry or for THOR.
Successful execution in today’s environment is fundamental to
driving long-term returns to our shareholders. Given that long-term
independent dealer sentiment and consumer interest in the RV
lifestyle remains positive, we remain confident in our ability to
generate long-term value for our customers and shareholders,” said
Martin.
First-Quarter Financial Results
Consolidated net sales were $3.11 billion in the
first quarter of fiscal 2023, compared to $3.96 billion in the
first quarter of fiscal 2022 and $2.54 billion in the first quarter
of fiscal 2021.
Consolidated gross profit margin for the first
quarter was 15.7%, a decrease of 90 basis points when compared to
the first quarter of fiscal year 2022 but an 80 basis point
improvement over the first quarter of fiscal year 2021.
Net income attributable to THOR Industries and
diluted earnings per share for the first quarter of fiscal 2023
were $136.2 million and $2.53, respectively, compared to $242.2
million and $4.34, respectively, for the prior-year period and
$113.8 million and $2.05, respectively, for the first quarter of
fiscal 2021.
Our consolidated results were driven by the
results of our individual segments as noted below.
Segment Results
North American Towable RVs
($ in thousands) |
Three Months Ended October 31, |
|
% Change |
|
|
2022 |
|
|
2021 |
|
Net Sales |
$ |
1,317,806 |
|
$ |
2,240,834 |
|
(41.2 |
) |
Gross Profit |
$ |
195,866 |
|
$ |
408,539 |
|
(52.1 |
) |
Gross Profit Margin % |
|
14.9 |
|
|
18.2 |
|
|
Income Before Income
Taxes |
$ |
111,007 |
|
$ |
266,282 |
|
(58.3 |
) |
|
As of October 31, |
|
% Change |
($ in thousands) |
|
2022 |
|
|
2021 |
|
Order Backlog |
$ |
1,567,829 |
|
$ |
10,444,698 |
|
(85.0 |
) |
- North American
Towable RV net sales were down 41.2% for the first quarter of
fiscal 2023 compared to the prior-year period. The decrease was
driven primarily by a 52.8% decrease in unit shipments, partially
offset by net selling price increases and a change in product
mix.
- North American
Towable RV gross profit margin was 14.9% for the first quarter of
fiscal 2023, compared to 18.2% in the prior-year period. The
decrease in gross profit margin for the first quarter was primarily
driven by an increase in sales discounts, and higher warranty and
overhead costs as a percentage of sales.
- North American
Towable RV income before income tax for the first quarter of fiscal
2023 was $111.0 million, compared to $266.3 million in
the first quarter last year, driven by the decrease in North
American Towable net sales.
North American Motorized RVs
($ in thousands) |
Three Months Ended October 31, |
|
% Change |
|
|
|
2022 |
|
|
2021 |
|
|
Net Sales |
$ |
1,123,519 |
|
$ |
925,028 |
|
21.5 |
|
Gross Profit |
$ |
185,735 |
|
$ |
139,721 |
|
32.9 |
|
Gross Profit Margin % |
|
16.5 |
|
|
15.1 |
|
|
|
Income Before Income
Taxes |
$ |
124,433 |
|
$ |
88,898 |
|
40.0 |
|
|
As of October 31, |
|
% Change |
($ in thousands) |
|
2022 |
|
|
2021 |
|
Order Backlog |
$ |
2,864,309 |
|
$ |
4,277,378 |
|
(33.0 |
) |
- North American
Motorized RV net sales increased 21.5% the first quarter of fiscal
2023 compared to the prior-year period. The increase in motorized
net sales for the quarter was driven primarily by an increase in
unit shipments of 11.1% due to continuing dealer restocking of
certain motorized products, and net selling price increases,
partially offset by changes in product mix.
- North American
Motorized RV gross profit margin was 16.5% for the first quarter of
fiscal 2023, compared to 15.1% in the prior-year period. The
improvement in gross profit margin for the first quarter was
primarily driven by net selling price increases and product mix
changes.
- North American
Motorized RV income before income tax for the first quarter of
fiscal 2023 increased to $124.4 million compared to
$88.9 million a year ago, driven by the increase in North
American motorized net sales.
European RVs
($ in thousands) |
Three Months Ended October 31, |
|
% Change |
|
|
2022 |
|
|
|
2021 |
|
|
Net Sales |
$ |
504,302 |
|
|
$ |
632,997 |
|
|
(20.3 |
) |
Gross Profit |
$ |
68,865 |
|
|
$ |
67,444 |
|
|
2.1 |
|
Gross Profit Margin % |
|
13.7 |
|
|
|
10.7 |
|
|
|
Loss Before Income Taxes |
$ |
(6,468 |
) |
|
$ |
(17,976 |
) |
|
64.0 |
|
|
As of October 31, |
|
% Change |
($ in thousands) |
|
2022 |
|
|
|
2021 |
|
|
Order Backlog |
$ |
2,985,205 |
|
|
$ |
3,348,355 |
|
|
(10.8 |
) |
- European RV net
sales decreased 20.3% for the first quarter of fiscal 2023 compared
to the prior-year period, driven by a 19.3% decrease in unit
shipments due primarily to continuing chassis supply constraints.
The decrease due to the foreign exchange rate decline of 14.4% was
essentially offset by net selling price increases and product mix
changes.
- European RV
gross profit margin was 13.7% of net sales for the first quarter
compared to 10.7% in the prior-year period. This improvement in
gross profit margin for the quarter was primarily driven by net
selling price increases, product mix changes and improved labor and
warranty costs, partially offset by an increase in overhead costs
as a percentage of sales.
- European RV loss
before income tax for the first quarter of fiscal 2023 was
$6.5 million, compared to net loss before income tax of
$18.0 million during the first quarter of fiscal 2022. The
improvement in loss before income taxes was primarily driven by the
improvement in the gross margin percentage.
Management Commentary
“Our strong first quarter performance reflects
the value created by the strategic initiatives the management teams
throughout THOR have implemented over a multi-year period which are
dedicated to improving sustainable profitability,” said Todd
Woelfer, Senior Vice President and Chief Operating Officer.
“Within our North American Towables segment, our
operating teams prudently reduced production in advance of our
North American Dealer Open House, held in late September 2022, to
position our independent dealers' inventory levels favorably as
they entered the new model year. These actions were a key driver to
our strong first quarter performance despite the macroeconomic
conditions. Within our North American Motorized and European
segments, ongoing pricing actions and process improvements helped
offset material cost pressures as we continued to make progress in
restocking dealer inventory levels. We have been more successful in
restocking our North American Motorized segment than we have been
in Europe where we face a higher level of ongoing chassis supply
challenges. As we enter the traditionally slower winter retail
season, we will remain disciplined relative to market conditions
impacting each of our individual operating segments,” continued
Woelfer.
“In addition to managing through the near-term
environment, we continue to make progress against long-term growth
initiatives related to automation, innovation, supply chain and
aftermarket. Airxcel has organically invested to expand its
operations and will be offering a number of new products in the
coming calendar year while a key strategic partnership with
Harbinger was announced which will further our innovation efforts
as we advance our eMobility strategy. We have also made significant
steps towards executing our aftermarket strategy and look forward
to begin realizing on that strategy this fiscal year. These
highlighted initiatives will not only strengthen the long-term
performance and earnings power of our company, but they also
demonstrate our commitment to being the global leader in the RV
industry as we drive to deliver an ever-improving experience for
our end consumers,” added Woelfer.
“In the first quarter of fiscal 2023, we
generated cash flow from operations of $94.0 million, which allowed
us to reinvest into the business, further strengthen our balance
sheet and return capital to shareholders during the quarter. In
October, we announced a 5% increase in our regular quarterly
dividend, which marked our 13th consecutive year of increasing our
dividend. In addition, we remain focused on reducing our overall
debt with a paydown of $15.0 million on our asset-based credit
facility and principal payments of $12.4 million on our term-loan
credit facility during the quarter. Also within the quarter, we
repurchased $25.4 million of our common stock, representing 338,733
shares at an average repurchase price of $75.01. Our ability to
generate cash from operations, even in challenging market
conditions, empowers us to continue to execute on our long-term
strategies which are designed to separate THOR from its competition
and drive long-term value to our shareholders,” said Colleen Zuhl,
Senior Vice President and Chief Financial Officer.
Outlook
“Looking ahead, we fully expect fiscal 2023 to
be a dynamic and challenging operating environment given the
current macroeconomic conditions and future uncertainties that
exist. While we do not expect to be immune from these challenges,
THOR has an unrivaled and proven track record within the RV
industry of successfully managing through economic cycles and
coming out of industry downturns as a stronger company. We remain
confident that THOR’s proven variable cost model, most recently
demonstrated at the depth of the pandemic in fiscal 2020, along
with the strength and experience of our management teams, will
position THOR to demonstrate its resilience once again in fiscal
2023. At the same time, our strong balance sheet and cash flow
generation profile allows us to invest in our strategic growth
initiatives that will drive sustainable long-term growth for the
benefit of our consumers and shareholders,” added Martin.
Fiscal 2023 Guidance
“Last fiscal year, we announced that we would
begin giving guidance. In the interim time frame, the market
conditions shifted and now present a very complex background for
our initial guidance. The market will certainly continue to shift
as we move through the fiscal year. Despite these factors, we are
confident in our ability to perform. We have the most talented and
experienced group of leaders and employees in the industry, we
react quickly and decisively, we focus on the financial
fundamentals of maintaining a strong balance sheet, generating
robust cash flows from operations, investing for our future and
generating strong returns to our shareholders, and above all else
we concentrate on providing the best products to our dealers and
end consumers,” concluded Martin.
The RVIA recently revised its North American
wholesale forecast for calendar years 2022 and 2023, projecting
total shipments to be between 379,200 and 403,600 units for
calendar 2023. The Company is aligned with the RVIA’s forecast and
expects North American retail to slightly outpace North American
wholesale shipments as independent dealers adjust the level of
stocking to reflect current conditions. Given the factors currently
impacting our independent dealers and end consumers as well as
recognizing the numerous uncertainties that exist in the segments
and geographies we serve, the Company expects to achieve the
following during fiscal year 2023:
- Consolidated net sales in the range of $11.5 billion to $12.5
billion
- Consolidated gross profit margin in the range of 14.2% to
14.9%
- Diluted earnings per share in the range of $7.40 to $8.70
During our fiscal 2023 second quarter, the first
retail shows of the calendar 2023 selling season will be held.
These shows will provide important data points that will help
inform our expectations. The Company expects to provide quarterly
updates to our guidance and, as the industry leader, will also
provide timely updates on changing market conditions when they
materially impact the Company’s guidance, as they become
apparent.
Supplemental Earnings Release
Materials
THOR Industries has provided a comprehensive
question and answer document, as well as a PowerPoint presentation,
relating to its quarterly results and other topics.
To view these materials, go to
http://ir.thorindustries.com.
About THOR Industries, Inc.
THOR Industries is the sole owner of operating
companies which, combined, represent the world’s largest
manufacturer of recreational vehicles.
For more information on the Company and its
products, please go to www.thorindustries.com.
Forward-Looking Statements
This release includes certain statements that
are “forward-looking” statements within the meaning of the U.S.
Private Securities Litigation Reform Act of 1995, Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking
statements are made based on management’s current expectations and
beliefs regarding future and anticipated developments and their
effects upon THOR, and inherently involve uncertainties and risks.
These forward-looking statements are not a guarantee of future
performance. We cannot assure you that actual results will not
differ materially from our expectations. Factors which could cause
materially different results include, among others: the impact of
inflation on the cost of our products as well as on general
consumer demand; the effect of raw material and commodity price
fluctuations, and/or raw material, commodity or chassis supply
constraints; the impact of war, military conflict, terrorism and/or
cyber-attacks, including state-sponsored or ransom attacks; the
impact of sudden or significant adverse changes in the cost and/or
availability of energy or fuel, including those caused by
geopolitical events, on our costs of operation, on raw material
prices, on our suppliers, on our independent dealers or on retail
customers; the dependence on a small group of suppliers for certain
components used in production, including chassis; interest rate
fluctuations and their potential impact on the general economy and,
specifically, on our profitability and on our independent dealers
and consumers; the extent and impact from the continuation of the
COVID-19 pandemic, along with the responses to contain the spread
of the virus, or its variants, by various governmental entities or
other actors, which may have negative effects on retail customer
demand, our independent dealers, our supply chain, our labor force,
our production or other aspects of our business; the ability to
ramp production up or down quickly in response to rapid changes in
demand while also managing costs and market share; the level and
magnitude of warranty and recall claims incurred; the ability of
our suppliers to financially support any defects in their products;
legislative, regulatory and tax law and/or policy developments
including their potential impact on our independent dealers, retail
customers or on our suppliers; the costs of compliance with
governmental regulation; the impact of an adverse outcome or
conclusion related to current or future litigation or regulatory
investigations; public perception of and the costs related to
environmental, social and governance matters; legal and compliance
issues including those that may arise in conjunction with recently
completed transactions; lower consumer confidence and the level of
discretionary consumer spending; the impact of exchange rate
fluctuations; restrictive lending practices which could negatively
impact our independent dealers and/or retail consumers; management
changes; the success of new and existing products and services; the
ability to maintain strong brands and develop innovative products
that meet consumer demands; the ability to efficiently utilize
existing production facilities; changes in consumer preferences;
the risks associated with acquisitions, including: the pace and
successful closing of an acquisition, the integration and financial
impact thereof, the level of achievement of anticipated operating
synergies from acquisitions, the potential for unknown or
understated liabilities related to acquisitions, the potential loss
of existing customers of acquisitions and our ability to retain key
management personnel of acquired companies; a shortage of necessary
personnel for production and increasing labor costs and related
employee benefits to attract and retain production personnel in
times of high demand; the loss or reduction of sales to key
independent dealers; disruption of the delivery of units to
independent dealers or the disruption of delivery of raw materials,
including chassis, to our facilities; increasing costs for freight
and transportation; the ability to protect our information
technology systems from data breaches, cyber-attacks and/or network
disruptions; asset impairment charges; competition; the impact of
losses under repurchase agreements; the impact of the strength of
the U.S. dollar on international demand for products priced in U.S.
dollars; general economic, market and political conditions in the
various countries in which our products are produced and/or sold;
the impact of changing emissions and other related climate change
regulations in the various jurisdictions in which our products are
produced, used and/or sold; changes to our investment and capital
allocation strategies or other facets of our strategic plan; and
changes in market liquidity conditions, credit ratings and other
factors that may impact our access to future funding and the cost
of debt.
These and other risks and uncertainties are
discussed more fully in our Quarterly Report on Form 10-Q for the
quarter ended October 31, 2022 and in Item 1A of our Annual Report
on Form 10-K for the year ended July 31, 2022.
We disclaim any obligation or undertaking to
disseminate any updates or revisions to any forward-looking
statements contained in this release or to reflect any change in
our expectations after the date hereof or any change in events,
conditions or circumstances on which any statement is based, except
as required by law.
THOR INDUSTRIES, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
FOR THE THREE MONTHS ENDED OCTOBER 31, 2022 AND
2021 |
($000’s except share and per share data)
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended October 31, |
|
|
|
2022 |
|
% Net Sales (1) |
|
|
2021 |
% Net Sales (1) |
|
|
|
|
|
|
|
Net sales |
|
$ |
3,108,084 |
|
|
|
$ |
3,958,224 |
|
|
|
|
|
|
|
|
Gross profit |
|
$ |
486,476 |
|
15.7 |
% |
|
$ |
655,424 |
16.6 |
% |
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
|
241,624 |
|
7.8 |
% |
|
|
295,883 |
7.5 |
% |
|
|
|
|
|
|
|
Amortization of intangible
assets |
|
|
35,219 |
|
1.1 |
% |
|
|
33,214 |
0.8 |
% |
|
|
|
|
|
|
|
Interest expense, net |
|
|
22,807 |
|
0.7 |
% |
|
|
20,720 |
0.5 |
% |
|
|
|
|
|
|
|
Other income (expense),
net |
|
|
(7,555 |
) |
(0.2 |
)% |
|
|
7,235 |
0.2 |
% |
|
|
|
|
|
|
|
Income before income
taxes |
|
|
179,271 |
|
5.8 |
% |
|
|
312,842 |
7.9 |
% |
|
|
|
|
|
|
|
Income taxes |
|
|
41,848 |
|
1.3 |
% |
|
|
68,039 |
1.7 |
% |
|
|
|
|
|
|
|
Net income |
|
|
137,423 |
|
4.4 |
% |
|
|
244,803 |
6.2 |
% |
|
|
|
|
|
|
|
Less: net income attributable
to non-controlling interests |
|
|
1,238 |
|
— |
% |
|
|
2,561 |
0.1 |
% |
|
|
|
|
|
|
|
Net income attributable to
THOR Industries, Inc. |
|
$ |
136,185 |
|
4.4 |
% |
|
$ |
242,242 |
6.1 |
% |
|
|
|
|
|
|
|
Earnings per common share |
|
|
|
|
|
|
Basic |
|
$ |
2.54 |
|
|
|
$ |
4.37 |
|
Diluted |
|
$ |
2.53 |
|
|
|
$ |
4.34 |
|
|
|
|
|
|
|
|
Weighted-avg. common shares
outstanding – basic |
|
|
53,656,415 |
|
|
|
|
55,422,854 |
|
Weighted-avg. common shares
outstanding – diluted |
|
|
53,928,751 |
|
|
|
|
55,790,712 |
|
|
|
|
|
|
|
|
(1) Percentages
may not add due to rounding differences |
SUMMARY CONDENSED CONSOLIDATED BALANCE SHEETS ($000’s)
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
October 31, 2022 |
|
July 31,2022 |
|
|
|
October 31, 2022 |
|
July 31,2022 |
Cash and equivalents |
|
$ |
291,704 |
|
$ |
311,553 |
|
Current liabilities |
|
$ |
1,621,816 |
|
$ |
1,755,916 |
Accounts receivable, net |
|
|
809,319 |
|
|
944,181 |
|
Long-term debt |
|
|
1,714,636 |
|
|
1,754,239 |
Inventories, net |
|
|
1,852,872 |
|
|
1,754,773 |
|
Other long-term
liabilities |
|
|
293,854 |
|
|
297,323 |
Prepaid income taxes, expenses
and other |
|
|
39,718 |
|
|
51,972 |
|
Stockholders’ equity |
|
|
3,650,959 |
|
|
3,600,654 |
Total current assets |
|
|
2,993,613 |
|
|
3,062,479 |
|
|
|
|
|
|
Property, plant &
equipment, net |
|
|
1,268,883 |
|
|
1,258,159 |
|
|
|
|
|
|
Goodwill |
|
|
1,783,954 |
|
|
1,804,151 |
|
|
|
|
|
|
Amortizable intangible assets,
net |
|
|
1,070,815 |
|
|
1,117,492 |
|
|
|
|
|
|
Deferred income taxes and
other, net |
|
|
164,000 |
|
|
165,851 |
|
|
|
|
|
|
Total |
|
$ |
7,281,265 |
|
$ |
7,408,132 |
|
|
|
$ |
7,281,265 |
|
$ |
7,408,132 |
Contact:Michael Cieslak,
CFAmcieslak@thorindustries.com(574) 294-7724
Thor Industries (NYSE:THO)
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Thor Industries (NYSE:THO)
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